Mortgage Rates Hold Steady

Mortgage rates for the most part held steady this week. The 30 year rate dropped from 5.12 to 5.10. Rates are still at historic lows. The rates for the last month have all been below anything we have seen in the last 40 years since we started tracking weekly mortgage rates. The 15 year rate held steady at 4.8. The 5 year arm rose from 5.24 to 5.27 and the 1 year arm dropped from 4.92 to 4.90. What the numbers below don't reflect is that rates mid week were a little higher midweek. But by the end of the week they had fallen. Below are rates for the last few weeks.

Jan 29, 2008
30-yr 5.10 15-yr 4.80 5-yr ARM 5.27 1-yr ARM 4.90

Jan 22, 2008
30-yr 5.12 15-yr 4.80 5-yr ARM 5.24 1-yr ARM 4.92

Jan 15, 2008
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

Jan 08, 2008
30-yr 5.01 15-yr 4.62 5-yr ARM 5.49 1-yr ARM 4.95

Dec 31, 2008
30-yr 5.10 15-yr 4.83 5-yr ARM 5.57 1-yr ARM 4.85

If you are planning on putting 20% down the 5 year arm and the 1 year arm are pretty pointless. The 5 year arm is above the 30 year fixed rate. The 1 year arm is below the 30 year fixed but doesn't really offer enough savings to be worth the tradeoff of forgoing locking in at historic lows. We have seen a trend recently where on some properties banks are allowing borrowers to get 10 percent down for a 5 or 1 year arm but are requiring 20 percent for a 30 year loan. I am not sure why banks are favoring arm's since that is what got them into this mess. Ok so in addition to looking at rates lets look at mortgage payments. We looked at a mortgage payment based on today's rates for a 200k loan. We also did the same thing looking at rates from 2 weeks ago (which was all time low point for the 30 year fixed rate mortgage). We also looked at rates from 2 months ago.

Jan 29
30-yr 1085.89
15-yr 1560.82
5-yr ARM 1106.88
1-yr ARM 1061.45

Jan 15
30-yr 1068.75
15-yr 1545.36
5-yr ARM 1104.4
1-yr ARM 1060.23

November 20th
30-yr $1204.24
15-yr $1658.67
5-yr ARM $1182.43
1-yr ARM $1109.36

As we can see although a mortgage payment would have been a little less 2 weeks ago all in all rates and mortgage payments have not changed that much. But we are still seeing substantial savings from 2 months ago.

So what is our advice. It should be pretty obvious but with rates at all time lows the time to refinance is now. In addition, if you are currently thinking of getting a mortgage I would lock in an interest rate sooner rather than later.

In general there is still more of a risk of rates going up over the next month than down. Rates simply don't have that much room to fall. So most likely we should see rates hold even or rise over the next month. In addition, there is a risk that rates could rise rapidly over the next 6 months if the economy improves.

Escapeso real estate provides information about mortgage rates on their site. They also provide a search of the Austin MLS